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Secretary of State

Securities Division > News Archive  > 2004 Press Releases > For Immediate Release: December 20, 2004 Rokita Helps Hoosiers Prepare for Holidays

Contact: Kate Shepherd
317-233-8655
Media@sos.in.gov

Secretary of State provides tips to avoid being scammed

Indianapolis, IN - Indiana Secretary of State Todd Rokita says the holidays and the end of the tax year provide numerous opportunities for scam artists. Rokita today outlined ways Hoosiers can protect themselves from investment fraud and identity theft.

"Identity theft is easier during this busy time of year because people are using their credit cards more often, and it is more likely that receipts with credit card information can be obtained by criminals," Rokita said. "Hoosiers may also be pressured to make investments for tax reasons before the end of the year. That is why I am outlining some investment tips for Hoosiers so a season of joy will not turn into one of financial loss."

Here are some tips to avoid being scammed:

  • Use common sense. If it sounds too good to be true, it probably is. Trust your instincts.
  • Be skeptical of unsolicited e-mails. Think twice if you get an unsolicited e-mail telling you about a secret road to riches. If it is such a good deal, why is this person sending you and millions of other people this "secret" tip? Experts estimate at least 95% of bulk e-mails are scams.
  • Know that there is no such thing as a risk-free investment. The higher the reward, the higher the risk involved.
  • Legally, the person selling the investment must provide you with written information about an investment opportunity. If he does not, it is probably not a legitimate investment.
  • To prevent identity theft, only carry the items you absolutely need with you. If your purse or wallet gets stolen, not every credit card will be fair game.
  • Do not put your social security number on your checks.
  • Keep an eye on your mail. Do not leave it in the mailbox too long after the carrier drops it off. Consider getting a mailbox that thieves cannot get into easily.
  • Never give personal information to people who contact you out of the blue, even if they claim to be with a company with whom you already do business. This is called phishing -- scam artists fish for victims and their personal information using the name of a company with whom they already do business as a hook. No legitimate company will ask you for personal information like credit card numbers in an e-mail. Do not be afraid to call the company using a number you already have to check out any communication.

Investors can check whether an investment and the person selling it are registered with Secretary Rokita's office by calling 1-800-223-8791 for information.

Investment Fraud and Identity Theft Fact and Tip Sheet

Ways to protect yourself from becoming a victim
Identity Theft

  • Identity theft occurs when someone obtains your personal information and uses it to run up large bills, pretending to be you.
  • Only carry the items you absolutely need with you; then if your purse or wallet gets stolen, not every credit card will be fair game.
  • Do not put your social security number on your checks.
  • Keep an eye on your mail. Do not leave it in the mailbox too long after the carrier drops it off. Consider getting a mailbox that thieves cannot get into easily. If they get your mail, they can find out your credit card numbers or apply for credit cards in your name.
  • Never give personal information to people who contact you out of the blue, even if they claim to be with a company with whom you already do business. This is called phishing -- scam artists fish for victims and their personal information using the name of a company with whom they already do business as a hook. No legitimate company will ask you for personal information like credit card numbers in an e-mail. Do not be afraid to call the company using a number you already have to check out any communication.
  • Invest in a good shredder. They are less expensive and less time-consuming than straightening out your credit if someone goes through your trash, obtains your personal information, commits identity theft and ruins your credit.

Investment Fraud

  • Americans lose an estimated $40 billion each YEAR to investment fraud.
  • Scam artists are not easily identified criminals. They often seem very friendly, helpful and professional. They are typically willing to do anything to keep their victims ("investors") happy - except refund the money. These scam artists go to great lengths to gain trust in a community.
  • Scams can happen to anyone. In Indiana alone, the Secretary of State's office has dealt with victims in many demographics: doctors, lawyers, business people, teachers, college students, retired individuals, and others.

Investment Myths

  • High reward with low or no risk There is no such thing as a risk-free investment. The higher the reward, the higher the risk involved.
  • Scams do not happen to smart people Many different kinds of people get scammed every day. It is a dangerous mentality to think that you are too smart to get scammed. A wise investor never lets his or her guard down. All investors have the right to protect their hard-earned money and should have complete control over the investments with which they are dealing.
  • This investment is guaranteed/insured There is no such thing as a "sure bet." All investments carry some level of risk. Investments cannot be guaranteed or insured.
  • No written information is available Legally, the issuer or person selling the investment must provide you written information about the investment opportunity. If no written investment information is available, it is a good sign that the opportunity is not legitimate.
  • No securities license or registration is necessary to sell this

All people selling securities must be registered or exempt from registration with the state of Indiana. A quick call to the Secretary of State's office will allow you check on the investment and the person selling it.

Red Flags
These phrases (or variations) are common signs that the investment is illegitimate and should serve as warnings to investors:

  • This offer is only good today/this is a limited-time opportunity
  • Just give me your credit card and checking account number
  • This is only available to a select group
  • I get nothing out of this deal
  • Do not tell anyone -- not even family
  • I will come to you; you do not have to come to me
  • Foreign banks pay great interest rates and have no taxes associated with them
  • This is "insider" information
  • Double your money in 30, 60, 90, 120 (etc.) days!
  • This is not a scam - you are too smart to be scammed

Prevention

  • Do your homework - ask for a prospectus and other documents regarding the investment, and make sure you understand everything about it (do not trust that the person offering it has your best interest in mind; that it your job).
  • If you receive a cold call, hang up! Never feel obligated to a solicitor.
  • ASK QUESTIONS: the more the better. Scam artists are easily rattled by your questions.
  • Remember, those touting investments are not doing it to help you out.
  • Contact the Secretary of State's office for information regarding the opportunity and the person offering it.

For Victims

  • * Report the problem to the Secretary of State's office, and file a complaint.
    • Fraud hotline 1-800-223-8791
    • Website